It's not a sure thing, but probably better than 50-50, that your friend is being ripped off. Check with the lender to see if it has been contacted at all. See if the loan modifier has any professional licenses such as an attorney's or a broker's license, then check their record and reputation with the licensing agency. The Attorney General and the Department of Consumer Affairs are very concerned about fraudulent loan-modification services and you can get various bulletins and warnings on line from these agencies' Web sites.

Very few loan mod companies are legitimate and able to actually obtain what they promise. Many take the money and talk a good story until after foreclosure, then blame in on the lender, which to a large extent is true. Many lenders won't even work with such companies. Have him ask for references from satisfied customers, check with BBB and the court clerk to see how many lawsuits have been filed against them., call Dept of Consumer Affairs to see if they are under investigation or listed as fraudulent, which is what he should have done before paying money. If he concludes they are fraudulent, demand his money back and consider filing suit for fraud, sooner rather than later after they disappear. Have him contact me if he decides to do so.

First anybody doing loan mods can no longer ask for any fees before the work is actually completed. A new law was passed on October 12, 2009. They even criminalized it so what they are asking is now illegal! Secondly ask for a copy of what they submitted, we generally will do a complete lender proposal and evaluation for $2,500.00. If they are not licensed with the Dept of Real Estate, registered with the attorney general or are an attorney you are probably getting scammed and should report them to the authorities.

Keep in mind however is could take where from 4 to 6 months or even longer to get a modification as the banks just dragging their feet.

If you want help give me a call as I have gotten money back for a couple of my clients before they came to us and I’ll give them a call for you for free.